Following Q2 Beat, Sarepta Has A Key Catalyst Coming In Q4

Sarepta Therapeutics Inc SRPT is trading up more than 20 percent Thursday after a second-quarter beat that included $35 million in sales of its Duchenne muscular dystrophy drug, Exondys 51, against a consensus of $23 million.

The Cambridge-based biopharma company has increased its full-year revenue guidance to $125 million–$130 million, up from a prior guidance of $95 million, according to Morgan Stanley. The firm’s own estimate for Sarepta’s 2017 revenue was increased from $120 million to $145 million.

Morgan Stanley maintains an Equal-Weight rating on Sarepta and raised its price target from $31 to $33 following the Q2 results.

In the second quarter, 150 physicians were prescribing Sarepta’s Duchenne therapy, up from 130 in the first quarter and 100 at the beginning of 2017, according to Morgan Stanley.

Sarepta announced a patent settlement with BioMarin Pharmaceutical Inc. BMRN on Tuesday that includes a one-time $35 million payment to BioMarin and a 5 percent royalty payment to BioMarin on Duchenne drug sales in the U.S. through 2023. Sarepta also announced the securing of $100 million in debt financing this week.

Dystrophin Results Coming In Fourth Quarter

Sarepta’s next catalyst on the horizon is a fourth-quarter release of data on dystrophin levels in Duchenne patients who are taking Exondys 51, equity analyst Matthew Harrison said in a Thursday note. Dystrophin is the protein that Duchenne patients lack, causing the disease.

“We expect investors will be solidly focused on the 4Q dystrophin data readout as that could increase perception of the viability of the platform and commercial durability of Exondys 51,” Harrison said (see his track record here).

At last check, shares of Sarepta were up 22.92 percent at $41.89.

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